The Back-up Plan

So the CFB Mortgage broad, Kirsten, got back to me on Wednesday to tell me that the bank statements I have are good enough, even though they are in the name of my LLC. Mortgage brokers are a lot better than banks or credit unions because their requirements aren’t as strict. Petey Tim from Empower got back to me after I asked him about turning it into a commercial loan, and he said that I will not qualify because I missed a couple mortgage payments in 2010 and it shows on my credit report. Because the mortgage delinquencies won’t be erased from my credit report for seven years to the day of payment, this asshole is trying to tell me that I can’t get a commercial loan until 2017!! So fuck Empower and Petey Tim, as it appears I’ll be doing business with CFB Mortgage and mortgage brokers for the next few years.

It’s not all good news though. Kirsten still has to run a hard inquiry credit check to get my credit score. This could pose a problem. The program she has me in only accepts applicants who have a 640 or higher. Every time a hard inquiry is applied, a credit score drops. That’s why they always say to make sure to get all your mortgage inquiries done in a span of 7-10 days, so that it would count as just one hard inquiry. I had Empower run a hard inquiry on the 11th of this month, and now CFB is running another today. So, if these inquiries hurt my score enough to knock me out of the 640 score needed, my application gets thrown out and I get no mortgage. I won’t know until February begins and the credit bureaus update their scores. Credit Karma has my score at 648, but that’s an unofficial score. I’m hoping that the money I paid to clear my Dell debt will cancel out the hard inquiries and I’ll be okay. But what if I’m not? What if, after all this bullshit, my score dips under 640 and they tell me that I can’t get a mortgage. I thought about it all this week and I have an answer. This is my back-up plan. I’ll just… buy the damned property outright! And here’s how I’ll do it:

I’ll wait until March and I should have about 34k in the bank. I’ll contact the desperate seller and tell him that the financing fell through but I’m still going to buy the property. I’ll give him 30k down and sign a contract saying that I’ve bought the property and must pay $2000 a month to the previous owner until the entire 59k is paid off (about 14 months). This is known as owner financing. I’ll use the rents from the newly bought property Charlie to pay the owner while taking care of the taxes and the National Grid bill with my own money. As I’m doing this, I’ll save at least $800 a month so that, when the property is completely paid off, I’ll have the money needed to throw everyone out and renovate the property to get higher rents. By August of 2014, that property will be fully rented with NO MORTGAGE, and I’ll be making about $2000 a month pure profit. The bad thing about this plan is that it will be almost a year and a half of saving NO MONEY towards property Delta. I’ll have to start from nothing in August of 2014, which means that I’ll have to work until near the end of 2015 to buy the next property and retire. Yet another year working two full-time security jobs. Ugh!

Obviously, I would much rather get the mortgage. Getting the mortgage by March will allow me to throw everyone out by May, and then I can do the renovations needed and have the place fully rented out by July/August of THIS year. Then it’s a race to make 50k so that I can put a purchase offer on a property Delta that makes at least $3,000 a month. At the latest, I should retire in the middle of 2015. So I’d rather go through that than to take an entire year off just to pay off property Charlie. It sounds good to have a property fully in my name, but it’s not the American way. Mortgages allow a buyer to spend a fraction of their own money to buy a property, and then make money off it while they build up money to buy a bigger property. I make money much faster this way, and it will allow me to retire while I’m 33. The thought of being 34 in 2015 and still working security jobs is something that I simply don’t want to fathom. The one comfort I’ll take from this post is that, no matter what, PPC #3 will be mine.

Update: 2:19pm. I just got a call from Kirsten. My credit score from all three bureaus is 637. Ugh. She said to reapply in a couple months and my score should be where it needs to be. A couple months. Yeah, right. Looks like I'm going with the back-up plan. >:-(  I really want to call off working at the shipping depot tonight because I'm gonna be as miserable as hell.